Tag Archives: Chartered accountant firm in India

cfc9b0d2a3f655160443856cfbf2fdd5

Avoid these common mistakes in income tax, keep tax notice at bay

In recent months, the tax department has stepped up efforts to ensure tax compliance. New rules have been introduced to plug tax leaks and officials are cracking down on evasion. Tax records are being put under the scanner and notices are being sent to individuals if the computer-aided selection system notices a discrepancy. Thousands of taxpayers have already received tax notices.

A notice from income tax department is a reason for taxpayer’s worry. There are few common mistakes which invites a call from income tax department. Thus, knowing these mistakes could help you avoid income tax notices.

  1. Not reporting interest incomes

One should report all the interest incomes received or accrued due to him in the previous financial year (for which the return is being filed) while filing his tax returns. Not reporting of interest income from bank and other sources is one of the most prominent reasons resulting in issue of income tax notice. Income tax department gets information of interest, commission & other income of the depositor from multiple sources. Non- reporting results in automatic issue of notices by the income tax system.

Smart tip: Calculate how much interest you will get on your FDs, RDs and other fixed income investments and add that to your income.

  1. Not filing income tax returns

Individual are required to file the income tax return only if income exceeds the basic exemption limit. Lot many taxpayers don’t file the return presuming that return is mandatory only if they have the tax liability. For instance, a person with a salary income of INR 4 Lakh and 80C deduction of INR 1.50 Lakh is required to file the return of income as income is above basic exemption limit even though the tax liability is Nil. Non- filing of return results in notice. It is advisable to file the income tax return even if the income is below basic exemption limit if they have carried out any high value transactions, as it will enable them to avoid income tax notice.

Further, many people don’t file their income tax returns because they have long term capital gains which are tax-exempt and without this their gross total income is below the tax-exempt income level. However, as per recent amendments in section 139 (1) of the Act, if your exempted long term capital gains along with gross total income exceeds the minimum exemption level, you are required to file your income tax return.

Smart tip: Do not miss filing your return even if your tax is zero or all your taxes are paid. File online to avoid mistakes.

  1. Non reporting of tax free incomes

As a taxpayer, you are duty bound to report all your income even if some is tax-free. One of the reasons for income tax notice is that the investment by taxpayer is not in accordance with the income profile of the taxpayer. There are lot many taxpayers who don’t discloses exempt income on the pretext that it don’t have any tax implications. Exempt income includes income such as LIC money back, PPF withdrawals, ELSS withdrawals etc. Often the amount of exempt income is in lump sum and invested back by the taxpayers in other investment avenues. By disclosing exempt income, taxmen are automatically able to link the source of new investment from exempt income. Disclosure of exempt income in ITR forms also could be treated as
self-explanatory for the spending of the taxpayers towards foreign travel, credit card & other spending. Thus, these exempt incomes are to be reported in the ‘Exempt Income’ schedule of the ITR and you can claim exemption on these under various sections of the Income Tax Act.

Smart tip: Mention all tax-free income in your ITR but claim exemption for it under various sections.

  1. Verify 26AS before filing tax return

26AS is a taxpayer’s statement showing the data of the assessee available with the income tax department. Taxpayer should verify that their return incorporates the data available in 26AS. Taxpayer should take efforts to rectify 26AS in case it contains entry not related to him. Taxpayer can avoid notices by verifying 26AS before filing income tax return.

Smart tip: Verify 26AS before filing income tax return.

  1. Non reporting of transaction in Income Tax Return

Non reporting of transactions in income tax return form is one of the most prominent reasons for inviting income tax notices. Even though the transaction has resulted in loss, it is better to disclose the loss figure in income tax return to avoid notices. These types of incidents are often there in shares, mutual funds & property. Be careful, disclose & avoid unwanted notice from income tax department.

Smart tip: Report all transactions including the transactions resulting in losses in income tax return.

  1. Misusing forms 15G / 15H to avoid TDS

Many investors try to avoid TDS by splitting their investments across different banks. Many others submit Form 15G or 15H so that their bank does not deduct TDS. These forms are declarations that the individual’s income for the year is below the taxable limit and therefore no TDS should be deducted from the interest. These are now required to be e-filed by the banks & other recipient. As a result, the income tax systems have handy information of all the taxpayers who have wrongly filed the declaration form. Taxpayers submitting this form in a casual way started receiving notice from the income tax department. Further, misuse of these forms is a serious offence. A false declaration not only attracts penalty but also prosecution.

Smart tip: File Forms 15G only if you fulfil both the conditions i.e. your taxable income for the year does not exceed the basic exemption of INR 2.5 Lakh and the total interest received during the financial year does not exceed the basic exemption slab of INR 2.5 Lakh. TDS is an interim tax and you can claim a refund if you have paid more than due.

  1. Non deduction of TDS

TDS net is widening to include individual taxpayers who are not in any kind of business or profession. Now, purchase of property above INR 50 Lakh attracts TDS. The rule is applicable even if you pay in instalments. In such cases, the TDS needs to be deducted from each payment and the money deposited with the government within seven days. While TDS deduction happens automatically when you buy a new property from a builder, in case of transactions between individuals, it is often ignored.

In addition, payment of rent exceeding INR 50,000 p.a. also attracts TDS. Non-deduction or non-filing of the TDS return after deduction / payment invites notice from the revenue office.

Smart tip: Make it clear to the seller of property / property owner that you will be deducting TDS from the payment. Make sure you have his correct PAN details.

  1. Non reporting of Cash deposit

Change in income tax return forms is an annual feature. This year, income tax return form required taxpayer to disclose the amount of cash deposited in a bank account. Also, if your expenses or cash withdrawals exceed certain limits, your credit card company and your bank are supposed to report that to the tax department. Thus, income tax systems have already received the information from the banks of all the taxpayers regarding their cash deposits. Taxpayers with heavy cash deposits or unmatched data are catching an eye of income tax and the income tax department may send a notice or pick up such cases for scrutiny.

Smart tip: Avoid cash transactions as far as possible. If depositing cash in bank account, keep record of source of cash.

Thus, precisely don’t forget to incorporate all the income details in income tax return. Don’t fail to file the income tax return. Disclose all the transactions, mainly of shares & property. Don’t be casual in submission of Form No. 15G / 15H. Be updated about the changing tax laws, more particularly about the TDS provision on property & rent & deduct proper TDS. Report all income. Disclose all the bank accounts correctly with cash deposits figure. Verify 26AS before filing income tax return & be a happy taxpayer.

For a more detailed discussion on income tax issues, or to obtain further assistance in personal income tax filings, corporate tax filings, tax planning, income tax assessments, response to income tax notices, please contact AJSH & Co LLP. If you have any query regarding this Click Here.

shutterstock_853963451

Foreign Direct Investment (FDI)

India has already marked its presence as one of the fastest growing economies of the world. It has been ranked among the top 10 attractive destinations for inbound investments. Since 1991, the regulatory environment in terms of foreign investment has been consistently eased to make it investor-friendly.

The measures taken by the Government are directed to open new sectors for foreign direct investment, increase the sectoral limit of existing sectors and simplifying other conditions of the FDI policy. FDI policy reforms are meant to provide ease of doing business and accelerate the pace of foreign investment in the country.

Foreign Direct Investment (FDI)

FDI because the name suggests, it’s associate degree investment directly created by a remote company into business in another country. Such investment may well be either within the kind of business enlargement in another country or may well be a results of acquisition of the corporate.

Direct Foreign investments in India approval were introduced by the then Finance Minister Dr. Manmohan Singh in 1991 under Foreign Exchange Management Act to promote such investments thereby increasing supply of domestic capital & increase the economic growth.

As per Foreign Exchange Management Act, ‘FDI’ means investment by non-resident entity/person resident outside India in the capital of an Indian company under Schedule 1 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations 2000.

Advantages of FDI in India
There are several benefits of increasing foreign direct investment in India. First of all, with more FDI, consumers will be able to save 5 to 10 percent on their expenses because products will be available at much less rates and to top it all, the quality will be better as well. In short, it will be a win-win situation for the buyers. It is also expected that the farmers who face a lot of economic problems will also get better payment for their produce. This is a major benefit considering how many farmers have been giving up their lives lately. It is expected that their earnings will increase by 10 to 30 percent.

FDI is also supposed to have a positive effect on the employment scenario by generating approximately 4 million job opportunities. Areas like logistics will be benefited as well because of FDI and it is assumed that 6 million jobs will be created. The governments – both central and state – will be benefited because of FDI. An addition of 25-30 billion dollars to the national treasury is also expected. This is a substantial amount and can really play a major role in the development of Indian economy in the long term.
Steps Taken by Government to Promote FDI
The Indian Government has taken a number of steps to show its willingness to allow more foreign direct investment in the country. In the infrastructure development sector, it has relaxed the norms pertaining to area restriction, the laws regarding gaining a comfortable exit from a particular project and the requirements relating to minimum capitalization. If companies are ready to commit 30 percent of their investments for affordable housing, then the rules for minimum capitalization and area restriction will be waived off. It is expected that this will benefit the construction sector a lot, especially in the form of greater investment inflow.

The Indian Ministry of Finance has also proposed that 100 percent FDI will be allowed in railways-related infrastructure. However, this does not include the operational aspects. While it is true that the foreign investors will not be allowed to intervene in railway operations, they will be able to provide for high-speed trains, such as bullet train, and enhance the overall network in the process.

Who can invest in India?

  • A Non-resident entity means a person resident outside India.
  • Non Resident Indian or Person of Indian Origin (PIO holder) or Overseas Citizen of India (OCI holder).
  • A body corporate means a company incorporated outside India.
  • Foreign Institutional Investor (FII) means an entity established or incorporated outside India which proposes to make investment in India and which is registered as a FII in accordance with the Securities and Exchange Board of India (SEBI) (Foreign Institutional Investor) Regulations 1995..
  • Foreign Venture Capital Investor (FVCI) means an investor incorporated and established outside India, which is registered under the Securities and Exchange Board of India.

If you have any query regarding this Click Here

2016-12-29-12_18_24-can-a-domain-be-trademarked_-indiafilings-com-_-learning-center

Can a Domain be Trademarked?

The Internet Domain Names have now become much more than mere representing the websites of different companies on the Internet. Today, in this age of well-developed information technology and worldwide businesses through Internet, these domain names have attained the status of being business identifiers and promoters. Since the commercial activities on the Internet are to go on increasing day by day, the importance and usefulness of domain names too, are to be enhanced for the purposes of greater publicity, popularity, and profitability of businesses in all economic sectors. According to Bill Gates, the founder of Microsoft, “Domains have and will continue to go up in value faster than any other commodity ever known to man”. Broadly, the functions of domain names are now quite similar to the functions of a trademark or service mark, for these purposes. Ours this very informative web-article offers rich and hugely beneficial and securing information regarding the registration and protection of the domain names as trademarks, with a view to help and serve people, companies, and professions pertaining to diverse occupational and economic fields.

General Rule
Domain names are written representation of an internet address. Hence, it is common for businesses involved in ecommerce to spend significant amount of money for the building of brand name around a domain name. Such businesses or those wishing to trademark a domain name can apply for the same by filling a trademark application as a wordmark. And, it is permisssible under the Trademark Act to allow for a domain name to be trademarked. However, just because a domain is registered does not make the mark eligible for trademark registration. The key test applied by the Trademark Examiner would be whether the wordmark proposed would be liable for registration, not simply, not simply as a domain name.

While processing of the application, the Trademark Registrar would still subject the application to usual criteria and test for registration of trademark. The elements of domain name included as part of the application would be not considered and only the reminder or the distinct part of the mark is considered.

What Names Can Be Registered?

Not all domain names can be registered as trademarks. The USPTO is particular about what can be registered as a domain name. For example, you will have a problem registering a generic name like drugs.com as a trademark. And you’d face an uphill struggle to register a domain name that you use solely as an address and not a signifier of services. For example, the law firm of Smith & Jones would have a hard time registering smith&jones.com as a trademark. It would have to prove that the domain is being used for some other purpose than for people to find and contact the law firm.

Example
If an application is made for the registration of snapdeal.com or snapdeal.in, the trademark examiner would not consider domain elements like .com or .in and would only consider the word “snapdeal”. If that word passes the normal test for objection like similar or identical trademark exists or other reasons, then the mark is cleared for publising in the Trademark Journal.

Further, in some cases, even words that are not eligible for registration as a word mark may be eligible for registratoin as a domain name, as there is no space in between the words and the addition of .com gives a character to the mark. For example, Fast Forward may not be eligible for trademark registration, but fastforward.com could be eligible for registration.

If you have any query regarding this Click Here

shutterstock_1287109131

Business Opportunities In INDIA

India has emerged as the number one FDI destination in the world during the first half of 2015.With FDI capital inflows of US$30.8b, India has outpaced all other economies, moving up to the premier position from being in the fifth spot during the corresponding period of the previous year.
In FY15, India’s growth was 7.3 per cent, which would increase to 7.5 percent each in the next two years of 2016-17 and 2017-18.

Why invest in India?
India is a large and rapidly growing consumer market constituting up to 300 million people for branded consumer goods.

  • This market is estimated to be growing at 8% per annum.
  • Demand for several consumer products is growing at over 12% per annum.

Consultancy on following:

Key Investors

  •  Expansion of business
  •  Setting up of new business abroad
  • SMEs and Large size firms

Benefits

  •  Better Business Contacts
  •  Ease of Business Promotion
  •  Effective communication
  •  Global Presence
  •  Improvement in Quality of Service
  •  Cost Savings
  •  Increased Revenue Potential

INDIA GROWTH & INITIATES

  • By 2040, India will have added 1bn people (Almost it’s entire current population to the middle class)
  • The biggest youth population in the world.(572 million are under the age of 24)
  • One of world’s top ten industrial producers.(19th largest exporter and 10th largest importer in the world.)
  • World’s third largest economy by 2030.
  • One of the world’s biggest telecom markets (with over 850 million wireless subscribers ).
  • One of fastest growing retail markets. (The estimated economic value of top 5 retail markets is $450 billion.)
  • Purchasing power parity, India’s economy is fourth largest in the world at $ 4.06 trillion

Now that you now know these facts, it becomes important that you sit and check yourself to see if you would still want to go ahead with setting up business in India. This is not to say that India isn’t a favorable place for business. As a matter of fact, you can make loads of returns of investment in India.

If you have any query regarding this Click Here

funding-growth-1-1024x512

Why One Should Do Business In India

Reserve Bank of India recently painted quite a gloomy picture for the Indian economy and rating house Moody’s too pointed out how corruption and scams are hampering the country’s business environment.

According to research firm Dun and Bradstreet, India will become a $5.6 trillion economy by 2020. The firm has also predicted a three-fold jump in the country’s gross domestic product, from $1.7 trillion last fiscal, on the back of rapid investment and growing consumer expenditure.

1. India’s GDP is on a roll
India’s gross domestic product is reaching new heights every year. India is now the 10th biggest economy in the world.

2. India’s trade is growing steadily
India’s imports are increasing more than 25 per cent year on year (since 1960). Even if 2009 saw a small fall-back due to global recession, in 2010 imports were however again growing at 32.2 per cent (August, 2010 — year on year growth) and reached over $140 billion (2010).

3. India’s FDI is on the rise
India’s foreign direct investment has been increasing significantly since the past five years.
There are three major countries that are known to be the biggest foreign direct investors in India. Topping the list of India’s foreign direct investment ranking is the small island nation called Mauritius.
This country is located very close to India and enjoys very small tax rate.
This is the reason why many companies set up their businesses there or invest in the existing organisations.
The tax levied is no more than 3 per cent.
In the second place is Singapore, which invests funds in almost the same sectors as the United States, though Singaporeans are also interested in the transportation sector.
Coming in at third place is the United States, which bring in more than $15 billion into the country.

4. India is turning into an industrialised economy

India is moving from being an agriculture based economy to an industrialised and service focused economy similar to the US, Europe and other industrialised countries.
India is now the world’s biggest manufacturer of small cars.
India is ranked 12th in the world in terms of nominal factory output.
The Indian industrial sector underwent significant changes as a result of the economic reforms of 1991.

5. India’s population keeps on growing
In terms of population, India is the second largest country in the world.
By 2025, India will be the biggest country in terms of population.
Western markets like the European Union and the United States are set to benefit from a 1.15 plus billion population in India.
The population will continue to grow also in terms of disposable income and consumption of Western products.

6. There are 771 million mobile phone subscribers in India
More than half the population owns a mobile phone in India now.
India is the world’s fastest growing wireless market, with 771 million mobile phone subscribers as of February 2011.
It is also the second largest telecommunication network in the world in terms of number of wireless connections after China.

7.Wireless technology to boost India’s Internet access
Wireless Internet is going to massively increase the access of hundred of millions of Indians across the subcontinent.
A new era awaits the country’s 584 million mobile phone users, with a faster and more robust Internet, and better access to data services including e-commerce, social networking and telemedicine.
Also ready are mobile device manufacturers with a slew of 3G handsets; providers of hosting, billing and network management services with expanded offerings; and content providers selling cell phone ring tones, wallpapers and graphics.

8. India’s GNI per capita is growing
Gross National Income per capita in India in terms of purchasing power parity is increasing.
In less than 10 years, the GNI per capita doubled (from $1,560 in 2000 to $3,250 in 2009).
This means Indian consumers can now afford double as much goods and services as just 10 years back.

9. Doing business in India is getting easier
India is among the top 40 nations to have carried out the highest number of business regulation reforms in the last five years, most of these related to introduction of technology to ease business operations.
Nowadays, in just 30 days one can have one’s business up and running. Doingbusiness in India is getting easier and investor friendlier year-on-year.

10. India & China: New Economic Gravity by 2050
Andreas De Rosi mentions in his article a research paper of Danny Quah, from the London School of Economics.
Quah wrote that the world’s economic centre of gravity is projected by 2050 to locate, literally, between India and China.
Observed from the Earth’s surface, that economic centre of gravity will shift away from its 1980 location a distance of 9,300 km or 1.5 times the radius of the planet.
So doing business in India is a must for companies with a long-term view.
India will sooner or later come back to the time when it was the biggest economy in the world.
Great news for Indians, indeed!

If you have any query regarding this Click Here

Start business in India

Role of the registrar of companies

In India, registering a company is not as easy as it may seem to be. The registrar of companies (ROC) plays a pivotal role in facilitating and promoting a business. It is impossible for a company to conduct business if it has not been issued a certificate from the registrar of companies. No company, under the companies act, 1956, can come into existence without the approval of the ROC. The registrar provides a certificate which acts as a lifelong proof of existence of the company. The ROC office contains data on more than 6 lakh companies that operate in India.

To obtain a certificate, the company has to produce various documents to the ROC. Some of the documents include memorandum of association, articles of association, pre-incorporation agreement for appointment of individuals as directors/managing directors and a declaration by an authorised person such as a high court lawyer or chartered accountant.

After the completion of statutory formalities and verification of documents, the registrar of companies, issues a certificate of incorporation. The ROC also issues a certificate of commencement of business. It is mandatory for all public limited companies to obtain this certificate before starting a business.

During certain times, the ROC can also refuse to register a company on certain grounds. If the documents provided are forged, the ROC can immediately refuse to register the company. No company with an objectionable name can be registered. The ROC can also refuse to register a company with unlawful objectives.

When you start a company, you will constantly need the support of the registrar of companies. In the long run, if you wish to change the name of your company, you will again have to go through the entire process.

According to the Companies Act, 1956, a company has to file all its resolutions with the ROC. The ROC is required to record the resolution. A company will basically have to inform the ROC about all its activities which includes appointment of directors, managing directors, resolutions concerning voluntary winding up etc.

Many people wonder as to why the ROC has to keep such information? The registrar of companies is responsible for what a company does. A company cannot undertake activities if it has not been authorised by the objects clause.

When a person wishes to start a company, he/she must know all the legal formalities. Any person can seek information about a company after paying the ROC the prescribed fee.

In case the ROC is not happy with the given documents, the ROC has the right to ask for additional documents. Lastly, the registrar of companies also has the right to file a petition seeking winding up of a company.

If you have any query regarding this Click Here